Gary P Naftalis is co-chairman of Kramer Levin Naftalis & Frankel LLP and one of the nation’s leading trial lawyers and pre-eminent litigators. For more than 40 years, he has represented individuals and corporations in all phases of complex bet-the-company civil, criminal and regulatory matters. Mr Naftalis formerly served as an assistant US attorney in the Southern District of New York. He received his law degree from Columbia, his MA from Brown, and his AB from Rutgers. He has taught at Columbia and Harvard and co-authored the leading work on the grand jury.
You have represented clients in some of the US’ most high-profile and complex litigation proceedings. Which has been your most interesting case and why?
One case that stands out is my successful defence of Michael Eisner, the CEO of the Walt Disney Company, in the shareholders’ derivative lawsuit relating to the hiring and termination of Michael Ovitz as Disney’s president. After a highly publicised 37-day trial in the Delaware Court of Chancery – the second longest trial held in that court – Mr Eisner and the other Disney directors prevailed and every claim against them was rejected. Because the case was tried with cameras in the courtroom, the public could see first-hand how the evidence demonstrated that Michael Eisner had acted properly in all respects.
How have the state and federal court systems in the US coped with the challenges presented by covid-19?
The coronavirus pandemic has profoundly affected our court system. Jury trials are not being held. And according to jury research, there is now an increasing number of people who say they are reluctant to serve as jurors because of health risks. Because of the pandemic, the courts have conducted court hearings and oral arguments virtually by Zoom or conference call in lieu of live in-person proceedings. To the extent the judges are comfortable with virtual proceedings, they may continue to rely on these even after the pandemic has ended.
Technology is increasingly prevalent in litigation. What do you perceive to be the main benefits and challenges of this development for practitioners?
Technology has complicated the work of the trial lawyer. There is so much more data now available that needs to be analysed and studied. In the old days, everything was on paper and the only available data were the records and communications that had been retained and not discarded in the normal course.
Now electronic communications — emails and text messages — have exponentially increased the universe of communications. People dash off emails and texts often without the care and editing that goes into sending a written memo or letter. And unlike written drafts and letters that can be discarded, electronic communications never go away. Deleted emails and texts can be retrieved from hard drives. The evolution of final documents can be traced through metadata.
On the positive side, presentation of data and arguments to judges and juries is enhanced by technology and can be much more effective and persuasive. Jurors pay more attention when documents and testimony are projected on a screen and so much more can be done with graphics.
How has the approach of regulators to investigations and related litigation evolved in recent years?
The scope of what is considered criminal and worthy of investigation and prosecution has dramatically increased. Matters that were once the subject only of private civil disputes are now the focus of government regulatory actions and even criminal prosecution. In addition, corporations are now being investigated and sanctioned much more frequently. It was not that long ago that corporations were hardly ever the focus of criminal investigations and prosecutions.
And perhaps most significantly, business criminal and regulatory enforcement has become global in scope. When the alleged misconduct is not confined to a single nation, multiple regulators and prosecutive authorities will now become involved, adding to the complexity and scope of the problem that counsel faces. It is now essential to consider the interests and agenda of all these regulators in formulating your strategy and approach.
As firm co-chair, what are your priorities for the firm’s development over the next five years, after 12 months of pandemic-impacted practice?
As the pandemic eases and the courts meaningfully reopen, our priority should be excellence in performance. You stand out by doing the best job for the client and always doing the highest-quality work. That is how you build a reputation. I believe that clients hire lawyers, not law firms. They want the best lawyer to handle their matter regardless of what firm he or she works at.
How important is it for a litigation specialist to have expertise across civil, criminal and regulatory proceedings, as you have?
Given the increase in parallel and multiple proceedings, it is essential that a litigator has expertise in criminal, regulatory and civil matters. Often there are lurking regulatory or even criminal issues in what might appear at first glance to be a strictly private civil dispute. Having tunnel vision and making tactical decisions based solely on what makes sense in the civil litigation, without considering its impact on pending or future regulatory actions, often has deleterious consequences for the client.
You have enjoyed a very distinguished career so far. What would you like to achieve that you have not yet accomplished?
I would like to have a chance to argue an important case before the United States Supreme Court. Over the years, I have tried meaningful civil and criminal cases in federal and state courts across the country and even an international arbitration in Paris. I have likewise argued many significant appeals before the US courts of appeal and highest state courts. I am still waiting for a chance to argue in the High Court, even though I thought I had the right case involving freedom of religion a couple of years ago.
"He is a standout name with enormous experience"
"Gary is a living legend of the white-collar Bar"
Gary P Naftalis is the co-chair of Kramer Levin Naftalis & Frankel LLP, and of the firm's extensive litigation practice. One of the nation's leading trial lawyers and pre-eminent litigators, he was selected as one of the 100 most influential lawyers in America by The National Law Journal and as one of the top 10 lawyers in New York by Super Lawyers (ranked first in 2008; 2012; 2015-2017; and 2019-2020). Mr Naftalis is a fellow of the American College of Trial Lawyers. He represents individuals and corporations in all phases of complex “bet the company” civil, criminal and regulatory matters, including those involving allegations of accounting irregularities, insider trading, market manipulation and other financial fraud.
In a career spanning more than 40 years, he has successfully represented numerous securities industry clients, including: Salomon Brothers in the investigation of US Treasury auction bidding practices; Kidder, Peabody & Co in the Wall Street insider trading probe; and CIBC in the investigation conducted by the Enron task force. In each instance, he persuaded the government not to bring criminal charges. He has also represented the CEO of Arthur Andersen in the Enron inquiry; the chairman of Global Crossing; the COO of MF Global; the CEO of Refco; and major figures in inquiries involving Drexel Burnham, Orange County, Cendant and British Petroleum.
He successfully defended Michael Eisner, CEO of The Walt Disney Company, in the shareholders' derivative lawsuit relating to the hiring and termination of Michael Ovitz. After a 37-day trial in the Delaware Chancery Court, Mr Eisner and the other Disney directors prevailed on all counts. The case was chosen as one of the top defence wins of 2005 by The National Law Journal. Mr Naftalis successfully won dismissal in favour of Kenneth Langone, former chair of the New York Stock Exchange compensation committee, of all charges brought against him by then-attorney general Eliot Spitzer relating to the compensation of NYSE chairman Richard Grasso.
Mr Naftalis won summary judgment for Sirius XM Radio dismissing a breach of contract action by Howard Stern seeking US$330 million in damages. He represented the City of New York in the inquiry by the New York County District Attorney relating to the fire at the Deutsche Bank building at the World Trade Center, in which no charges were brought against the city or any of its agencies or its officials.
Mr Naftalis defended Rajat K Gupta, the former managing director worldwide of McKinsey, in both a high-profile criminal insider trading trial and parallel SEC enforcement action, where he obtained a precedent-setting decision challenging the attempt by the Securities and Exchange Commission to utilise an administrative process rather than go to court.
Mr Naftalis received his AB from Rutgers University; his MA from Brown University; and his LLB from Columbia Law School. He served as deputy chief of the criminal division in the US Attorney's Office for the Southern District of New York. Mr Naftalis has been a member of the faculty at Columbia and Harvard law schools. He is the author of numerous books and articles including The Grand Jury: An Institution on Trial (the leading work on the grand jury system) and Sentencing: Helping Judges Do Their Jobs, both of which he co-authored with Judge Marvin E Frankel.